ECON 1001 USYD EXAM QUESTIONS AND ANSWERS SOLVED CORRECTLY LATEST UPDATE

ECON 1001 USYD EXAM QUESTIONS AND ANSWERS SOLVED CORRECTLY LATEST UPDATE explicit opportunity costs - Answers costs that involve direct payment (eg. the cost of going to university) implicit opportunity costs - Answers opportunities that that do not have an explicit cost (eg. the loss of possible income by coming to university instead) marginal benefit (MB) - Answers the benefit of an extra unit consumed, fo the consumer. Consumers will stop buying a good when MB = P marginal cost (MC) - Answers the additional cost of buying an extra unit ceteris paribus - Answers all other things held constant, to examine only one factor at a time causation - Answers when a change in one variable causes a change in another variable correlation - Answers when two or more factors are observed to be moving in the opposite direction together production possibility frontier - Answers illustrates the trade-offs facing an economy that produces only two goods. It shows the maximum quantity of one good that can be produced for any given quantity produced of the other absolute advantage - Answers the ability of a party to produce a good or service more efficiently than its competitors comparative advantage - Answers the ability of a party to produce a good or service at a lower opportunity cost than its trading partners specialisation - Answers where a party focuses on the production of a limited scope of goods to gain a greater degree of efficiency factors influencing the level of demand - Answers income, taxes, expectations, price of substitutes short run - Answers the period of time during which at least one of a firm's inputs is fixed long run - Answers the time period in which all inputs can be varied production functions (cobb-douglas function) - Answers shows the relationship between a variety of inputs used and the maximum quantity of outputs produced marginal product (MP) - Answers the change in output when one or more extra inputs is used. It is generally diminishing fixed costs (FC) - Answers costs that do not vary with output. When output is zero, all costs are fixed costs variable costs (VC) - Answers costs that vary with output total costs (TC) - Answers the sum of fixed costs and variable costs VC formula - Answers TC-FC FV formula - Answers TC-VC TC formula - Answers FC+VC average fixed costs (AFC) - Answers the fixed cost per unit of output average variable costs (AVC) - Answers the variable cost per unit of output average total costs (ATC) or (AC) - Answers the total cost per unit of output AFC formula - Answers FC/q (where, q=quantity and FC=fixed costs) AVC formula - Answers VC/q (where, q=quantity and VC=variable costs) ATC formula - Answers TC/q (where, q=quantity, and TC=total costs) the relationship between ATC, AVC and MC - Answers MC passes through the minimum of ATC and AVC long-run marginal costs (LRMC) - Answers the marginal cost of increasing output by o